In a significant development for the Indian fintech industry, PhonePe has raised another $100 million as part of an ongoing round. This infusion brings the total amount raised by the company in recent weeks to $450 million, despite the market downturn.
Partners and Investment
The new investment was led by Ribbit Capital, Tiger Global, and TVS Capital. The ongoing round values PhonePe at a pre-money valuation of $12 billion. Walmart-backed PhonePe had previously stated that it plans to raise up to $1 billion as part of the ongoing financing round.
Leadership’s Perspective
"We are excited to continue our partnership with PhonePe as they lead the digital payments sector in India, a market we believe is still in the early stages with significant growth potential ahead," said Scott Shleifer, a partner at Tiger Global, in a statement.
Market Positioning and Competition
PhonePe is currently India’s most valuable fintech startup. It competes with Google Pay and Paytm. While Paytm, which expects to reach $1 billion revenue by March this year, is valued at under $5 billion, PhonePe commands about 50% of all transactions on the UPI network.
UPI Network Dominance
The UPI network, built by a coalition of retail banks in India, has become the most popular way Indians transact online. It processes more than 8 billion transactions a month, with PhonePe dominating this space.
Regulatory Clarity and Growth
A concern for PhonePe’s growth was the Indian regulator enforcing a cap on market share for each participating player. However, its recent extension to the deadline until 2025 has paved the way for the startup for another two years of fast growth. This has also led to increased competition among players, with Google’s GPay and PhonePe currently processing more than 80% of all UPI transactions.
Future Plans
PhonePe is slowly becoming a distribution engine, leveraging its large user base to cross-sell products such as insurance. Industry experts reckon that PhonePe’s end game might be to become a bank, which justifies the lofty valuation.
Financials and Projections
PhonePe clocked a revenue of $234.3 million in the first nine months of 2022. The firm projects a revenue of $325 million for the calendar year 2022 and $504 million for 2023, according to a valuation report prepared by KPMG.
Key Metrics and Projections
- Revenue: $234.3 million (first nine months of 2022)
- Projected Revenue (2022): $325 million
- Projected Revenue (2023): $504 million
- EBIDTA positive until calendar year 2025
Leadership’s Statement
"We are privileged to have a great set of leading global investors, both existing and new, who believe in our mission of building massive technology platforms to bring at-scale financial and digital inclusion in India," said Sameer Nigam, co-founder and chief executive of PhonePe.
Related Topics:
- Fintech
- India
- Paytm
- PhonePe
- Ribbit Capital
- Startups
- Tiger Global
- TVS Capital
About the Author
Manish Singh is a senior reporter at TechCrunch, covering India’s startup scene and venture capital investments. He also reports on global tech firms’ India play. Before joining TechCrunch in 2019, Singh wrote for about a dozen publications, including CNBC and VentureBeat. He graduated in Computer Science and Engineering in 2015.
